Finance Committee meets at SLA headquarters - Special Libraries Association

Information Outlook, June, 1999

The Finance Committee held its spring meeting at the association headquarters on April 19. The agenda included topics related to the dosing of fiscal year 1998, the review of FY 1999 finances, and fiscal planning for years 2000 and beyond.

The committee reviewed the 1998 audit report and management letter as prepared by the independent accounting firm of Langan Associates. The reports indicate that the association is conforming to generally accepted accounting principles and is operating under sound policies and practices. The 1998 General Fund reports a deficit in the amount of $15,668 that will be carried forward to FY 1999 as an operating expense as approved by the Board of Directors. The operating deficit is due primarily to a lower than anticipated level of registration from the 1998 Annual Conference.

The committee reviewed the financial statements and budget variance report for March 1999. While the financial performance is currently strong, there is some concern regarding income in membership and the annual conference at this point. Staff will continue to monitor the fiscal progress in each of the program areas and report variances from budget. If the financial prospects still cause concern mid-year the association will enter into a financial contingency plan.

Representatives from Merrill Lynch Asset Management attended the meeting to present the detail regarding the association's investment accounts and to provide insight into the performance of the investment portfolio. The association's reserves and returns are expected to remain strong throughout 1999.

With regard to fiscal year 2000, the committee reviewed the financial assumptions approved by the Board of Directors at the Winter Meeting. The financial assumptions will be incorporated into the Association Program Plan and Budget documents developed by the staff. The assumptions include: (1) the Urban Consumer Price Index is projected to rise approximately 2%; (2) the AIMS Association Financial Index is projected to increase near 4% which will relate to an across-the-board increase in operational expenses; (3) growing U.S. trade deficits will actually help hold down inflation and interest rates; (4) overall staffing costs will increase by 7% to 8% to fund the salary administration plan as approved by the Board of Directors and will include the expansion of outsourcing; (5) legal and other professional services will continue to rise at a rate of 5% to 6%; (6) travel and lodging costs will continue to increase 5% to 8%; (7) further technological advances and the continued implementation of the virtual association will enable the association to provide more products and services in the digital format, offering potential sources of additional revenue. However, the initial period of changing any delivery method causes uncertainty. Staff will be faced with offering both digital and print formats in undetermined quantities as the initial demand may be somewhat vague; (8) SLA's international interests and exposure will continue to increase, especially in relation to Global 2000. This will create greater demand for the development, implementation, and delivery of products and services to a growing international membership.

With regard to the specific projections for membership counts, the following assumptions were made in projecting the 2000 figures: (1) the growth in regular and associate memberships will be significant (nearly 4%) based on current promotional plans; (2) the percentage growth in student members will increase over the 1998 and 1999 actual figures as the Student and Academic Relations Committee continues to actively pursue new student groups and promote membership in SEA; (3) the decrease in the number of retired members will continue to be evident. We have experienced an 11% to 18% decrease in the number of retired members over the past three years. However, the Retired Members Caucus is promoting the retired membership quite heavily and we have proposed a modest increase over the 1999 actual figures; (4) the dues and fees income figures are based on the rate structure in place as of January 1, 1999; (5) an adjustment of $18,750.00 has been included for 300 unemployed members to pay the one-time 50% reduced regular member dues rate of $62.50; (6) as part of the aggressive marketing plans for membership growth, the formation of two new chapters is projected. With this projection comes the expectation for additional chapter affiliations.

The committee also spent considerable time in reviewing and updating the association's long-range financial plan; reviewing and adopting practices and protocols for SLA's evolving fund development program; and defining financial objectives relating to the funding of the Diversity Leadership Development Program, chapter visits; unit allotments; and capital expenditures.

The Financial Committee will meet informally at the Annual Conference in June. The fall meeting is tentatively scheduled for September 27, 1999, at the Association headquarters where the main focus will be the FY 2000 Budget and the Association's Long-Range Financial Plan